Financial pressures put Manitobans on unexpected edge
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How would you handle an unexpected $500 fee?
Amanda Burwell says she wouldn’t pay out of pocket. She can’t — she has an overdraft at the bank, and is working a side job on top of her full-time health-care aide position to get by.
“It’s getting ridiculous,” the Manitoba resident said.
More than one-quarter of Canadians living in the Prairies said they can’t cover an unexpected expense of $500, according to recent Statistics Canada data.
Nearly 40 per cent reported difficulty meeting their household’s financial needs over the past year.
“I find that now, I’m back into the poverty line, even though I work a good job,” Burwell said Tuesday, shopping at a local Walmart.
“I find that now, I’m back into the poverty line, even though I work a good job.”–Amanda Burwell
There was a deal on chips; it was her third stop, she said. “I’ve spent $300 and I don’t even have a trunk full (of groceries).”
She was using the vehicle she shares with her fiancée and two best friends (all of whom rent a house together to save money).
Five years ago, Burwell envisioned buying a house. Now, she’s “waiting for the market to crash.”
Thirty-nine per cent of Statistics Canada’s Prairies respondents cited concerns with rising housing prices. They were among the least concerned across the country, its data said.
Meantime, Burwell is anxious about her financial future and doesn’t plan to have children any time soon because of the associated cost.
Other local shoppers, too, expressed frustration at grocery chains’ increased profits during the COVID-19 pandemic.
“It’s kind of hard to live here now,” said Manny Quijano, who’s planning to return to the Philippines after spending 44 years in Canada.
It’s cheaper to live there, he said.
“Now… $100, $200 can’t even feed, like, a kid,” Quijano said, adding he is currently not working. “The big companies can just raise their prices, but they don’t realize you’re not getting any increase on your wages.”
“The big companies can just raise their prices, but they don’t realize you’re not getting any increase on your wages.”–Manny Quijano
Manitoba’s inflation rate rose 7.9 per cent last year, an increase higher than Canada’s average of 6.8 per cent. Food costs hiked 8.9 per cent nationally.
Nearly half — 47 per cent — of Manitobans feel nervous about their current financial situation, according to a recent Edward Jones study.
Twenty-four per cent reported feeling fearful — a 10 per cent jump above the national average.
“It’s not surprising when someone just can’t afford that extra $500,” said Enoch Omolulu, founder of personal finance blog Savvy New Canadians.
Omolulu said he has heard from newcomers who’ve arrived in Canada and started with low-paying, entry-level jobs.
“You combine that with the high inflation and the higher cost of living… it’s obvious what the issue is.”
Racialized people were more likely to report concern over housing costs and unexpected expenses than their non-racialized counterparts, according to Statistics Canada data.
Nationally, 51 per cent of Black respondents didn’t expect they could cover an unplanned $500 expense. The same answer came from 21 per cent of non-racialized, non-Indigenous respondents.
“It really does come to the point where Canadians are just trying to manage day-to-day expenses,” Omolulu said. “Anything outside of that is going to be a pain.”
Rising interest rates have added a burden to homeowners, he noted.
A common banking tip is to spend no more than 30 per cent of your credit limit.
“I see people ignoring that,” Omolulu said. “You just spend what you can spend and, hopefully, can pay it back at the end of the month. If you can’t, you just carry it from month to month.”
The average Manitoban held $17,095 of debt in 2022’s third quarter, according to an Equifax Inc. release. It was an increase of 0.49 per cent from the year prior.
“It really does come to the point where Canadians are just trying to manage day-to-day expenses… Anything outside of that is going to be a pain.”–Enoch Omolulu
Families are selling belongings online for extra cash, and Manitobans are taking second jobs to afford the increased cost of living, Omolulu said.
Still, more Manitobans are wanting to contribute to retirement savings plans, noted Julie Petrera, a senior strategist at Edward Jones.
The financial services company said its data found half of Manitobans planned to contribute to an RRSP this year, with 22 per cent expecting to invest their maximum amount.
“This is the first time since the beginning of the pandemic that we’ve seen this much confidence in people wanting to save for the long term,” Petrera said.
It’s likely because recent Bank of Canada’s interest rate hikes have cooled spending in areas such as housing, she added.
Redfern Research conducted the online Edward Jones survey Jan. 27-29, with 1,666 Canadians participating. The margin of error would be considered accurate to within plus or minus 2.4 per cent, 19 times out of 20.
Gabby is a big fan of people, writing and learning. She graduated from Red River College’s Creative Communications program in the spring of 2020.